Archive for March, 2011

On Friday, a Wisconsin judge issued a temporary restraining order to block Governor Walker’s recently passed collective bargaining bill. It is important to consider the merits of the bill and look at the protections that the collective bargaining bill provides to residents.

So what has Scott Walker really done in Wisconsin? Well, he has restricted, not ended, collective bargaining, which will protect taxpayers from way over the market benefit packages that have resulted from the past alliance of politicians and the unions who fund them. We have seen the damage these spiraling and uncontrollable pension and benefit liabilities can do to states many years after they are adapted. Prime examples include Illinois and California where huge unfunded liabilities have led to budgetary crises, threatened credit ratings, and increased interest rates on public debt. Walker also has brought public employee benefit packages into line with the rest of Wisconsin workers, changing the benefit plans so that state workers will pay into their pensions and healthcare benefits.

While the left attempts to portray the removal of collective bargaining as un-American, the simple fact is that residents entrusted the state with making the right decisions with their tax dollars. Yet for decades, these states opted to give public unions pensions that would eventually spiral out of control and cause major fiscal disruption to state governments. For example, Ohio’s unfunded liability could be as high as $166 billion dollars or 35% of the Gross State Product.

When these plans were awarded, politicians justified these deals because they were literally playing with someone else’s money, and they never contemplated the fiscal damage unfunded pensions could cause down the road. Now states across the nation are facing fiscal ruin because of these well intended but fiscally reckless deals. Worse, some are calling for the federal government, facing its own ballooning deficit due to entitlement spending like Social Security and Medicare, to bailout these states.

Governor Walker has also taken away the Holy Grail for public employee unions – automatic union due deductions. With the removal of the automatic deduction, now public employees can make their own decisions on whether or not to pay union dues. Walker is ultimately giving workers the ability to be pro-choice with their union dues and have a fair choice about their union. While this is great for public employees, this is terrible for union bosses.

Governor Scott Walker has shown leadership and courage through a rancorous time, having to deal with an ironic hijacking of the democratic progress by Wisconsin Democrats while fighting the union establishment, unsympathetic media and well-organized progressive groups. Governor Walker could have followed many other politicians down the road of subservience towards the unions and raised taxes to balance the budget. Instead, Scott Walker campaigned on fighting for Wisconsin residents who don’t have the luxury of a taxpayer-funded union machine. And because of his fight, he won, and so did we.

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On October 28th, just days before the November general elections I wrote about four gubernatorial candidates to watch as unconventional politicians. Those included New Mexico’s Susana Martinez, Nevada’s Brian Sandoval, Oregon’s Chris Dudley and Wisconsin’s Scott Walker. Dudley, a terrific man lost but hopefully will be back to fight again. The other three won and are already showing results. I wrote how Scott Walker “demonstrated how to balance a budget consistently without raising taxes.” And he is showing that right now as Governor of Wisconsin.

This nation is faced with frightening deficits and unfunded liabilities. Federal spending is double what it was ten years ago, and this year’s deficit is projected at $1.6 trillion. States add another $130 billion of shortfalls this year, and almost all states have large unfunded pension and health care liabilities.

I for one am thankful that governors like Scott Walker are showing how to deal with this looming crisis.

Wisconsin itself is facing a $3.6 billion budget shortfall over the next two years and Governor Walker has proposed real solutions that would decrease the state’s structural deficit by 90 percent. As part of Walker’s plan to tackle Wisconsin’s looming budget crisis, he has made the courageous and crucial decision – like Chris Christie in New Jersey – to bring public employees’ benefit packages down to a more comparable level with those in the private sector.

Robert Costrell writes in the Wall Street Journal that Milwaukee teachers receive 74.2 cents on the dollar in health and retirement benefits. An employee in the private sector receives just 24.3 cents on the dollar. In some cases, the benefits package is equal to half of the total employment package. Costrell found that “the average Milwaukee public-school teacher salary is $56,500, but with benefits the total package is $100,005, according to the manager of financial planning for Milwaukee public schools.”

The reason for these nice gold-plated benefits packages are that in the past politicians never had the courage to stand up to unions and insist that benefits be tied to market realities. Quite simply it was too easy to kick that political can down the road and let the next Governor or the next generation of taxpayers deal with the mess. That is not only radically irresponsible; it is a recipe for our country’s ruin.

Charles Krauthammer writes in the Washington Post that “in the public sector, the politicians who approve any deal have none of their own money at stake. On the contrary, the more favorably they dispose of union demands, the more likely they are to be the beneficiary of union largess in the next election. It’s the perfect cozy setup.”

In light of this, Scott Walker has decided to tackle his state’s budget deficit not by raising taxes on hard working Wisconsonites in the midst of an economic downturn but by making desperately needed changes to the state’s benefit and entitlement system. The rising cost of retirement packages and insurance has been identified as a threat to not only states like Wisconsin, but also the United States as a whole.

The response to Scott Walker’s budget from Wisconsin Democrats has been to flee the state and shut down the Senate, halting all floor debate and discussion – one of the hallmarks of our American democracy. In another courageous step, I am pleased to say the The Republican Governor’s Association has wisely decided to support Scott. For years, the RGA has been a hot bed of ideas and action for practical, conservative governance. While it has showcased some of the great laboratories of our American democracy, its main function was to get Republican governors elected – and it’s done that quite well over the years. In an unprecedented step, after seeing millions of union dollars and thousands of outsiders pour into Wisconsin to fight Governor Walker’s good governance, The Republican Governors Association decided that is was time to show the country and the union bosses that we have Scott Walker’s back by launching a an advertising campaign in support of his efforts on TV and online. This is one of the most important fights of our time and it will impact the lives for generations of Wisconsinites and American to come. Our leaders must show courage and conviction to take on the tough fights and make the right decisions – and when they do, we must show them our strong and unwavering support.

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